Starbucks Fires 2,000 Employees in Middle East... "Couldn't Withstand Anti-American Boycott"

Sales Plummet After Israel-Hamas War
Fiscal Year Q1 Sales Decline More Than Expected

Starbucks Kuwait City branch view. [Image source=Starbucks Instagram]

Starbucks franchises in the Middle East have initiated a workforce reduction of 2,000 employees. This is due to a sharp decline in sales of the American coffee brand Starbucks, as anti-American boycott movements have spread throughout the Middle East amid the war between Israel and Hamas. While Starbucks claims there is no political intent, concerns are rising that the boycott movement will continue until the war situation ends.

According to the Associated Press on the 5th (local time), Kuwait-based Alshaya Group, which operates Starbucks franchises in the Middle East, announced in a statement that it has decided to lay off 2,000 employees in the Middle East due to the ongoing boycott movement following the war between Israel and the Palestinian armed faction Hamas. Alshaya Group explained, "Due to continuously worsening business conditions over the past six months, we have made the sad and difficult decision to reduce the number of our colleagues." Most of the laid-off employees are foreign migrant workers from Southeast Asia.

Alshaya Group operates 1,900 Starbucks locations across the Middle East, including Kuwait, where its headquarters are located, as well as Saudi Arabia, the United Arab Emirates (UAE), Lebanon, Egypt, Bahrain, Jordan, Morocco, Oman, and Qatar. The total number of employees working at Starbucks stores throughout the Middle East reaches approximately 19,000.

The main reason Starbucks has undertaken large-scale layoffs exceeding 10% of its total Middle East workforce is the widespread boycott movement led by Islamic fundamentalist groups and pro-Palestinian organizations following the outbreak of the war between Israel and Hamas. American flagship brands such as Starbucks and McDonald's have primarily been targeted by the boycott.

Alshaya Group insists that Starbucks' profits are not used to support Israel's war efforts. The group stated, "We have no political intent. We have never used, nor do we use, money earned through Starbucks to fund government or military operations," adding, "False and misleading information about Starbucks is spreading online, and we are working to respond to it."

Amid the impact of the boycott, sales in the Middle East have plummeted, dealing a blow to Starbucks' overall brand revenue. Starbucks reported revenue of $9.43 billion (approximately 12.6 trillion KRW) for the first quarter of fiscal year 2023 (October to December 2023) announced at the end of January. This fell short of the $9.6 billion expected by Wall Street analysts.

This content was produced with the assistance of AI translation services.